“It is an obvious conflict of interest,” Sanders, an
Independent from Vermont, said today in an e-mail response to a
question from Bloomberg News. “This is a clear example of the
fox guarding the henhouse.”

Dimon serves as a Class A director at the New York Fed,
which is reserved for bankers. The Dodd-Frank Act, which Sanders
helped draft, eliminated the ability of Class A directors from
the banking industry to appoint Fed district bank presidents.
Fed banks also have Class B and C directors who are appointed to
represent the public.

Dimon said in a conference call with analysts on May 10
that the bank suffered a $2 billion trading loss because of
“sloppiness and bad judgment.” Fed officials have stepped up
supervision of the largest banks, and are likely to take a close
look at JPMorgan’s risk management procedures.

Sanders, who serves on the Joint Economic Committee, said
he is working on legislation to end the participation of bank
executives on Fed boards.

“No one who works for a firm receiving direct financial
assistance from the Fed should be allowed to sit on the Fed’s
board of directors or be employed by the Fed,” Sanders said.